Premier League clubs have failed to come to an agreement over a support package for the English Football League (EFL) which could lead to the first intervention from the newly formed independent regulator for football.
Shareholders of the 20 Premier League clubs met Monday afternoon, aiming to resolve the ongoing talks with the EFL over a proposed £836m deal. However, the 14 clubs needed to pass a majority vote were not met.
The failed revised proposals included an upfront payment of £44m to support the lower tiers of English football, followed by another £44m across the next several months. Both payments would have been deferred as loans in which the EFL would pay the full £88m back to Premier League clubs over the course of six years.
This reportedly did not sit well with clubs in England’s top-flight league, especially after it was revealed that the vote would be made independent of any future conditions pertaining to reforms to the Premier League’s Profit and Sustainability Rules, which are set to be replaced by a new system of financial regulation.
Talks between the Premier League and EFL stalled last December after clubs highlighted concerns over the amount of money being sent down the English pyramid as this could lead to “serious financial damage” to themselves and in turn, cause wider financial problems in the long-term.
This is however, in light of the £6.7bn broadcast rights agreement the Premier League secured with national broadcasters Sky Sports and TNT Sports.
The Premier League announced that it will be contributing £1.6bn of the broadcast deal to the grassroots level between 2022 and 2025, yet it did not mention using some of the funds to contribute to the New Deal.
With no agreement between the two parties now confirmed, this may lead to the intervention of the new football independent regulator which was announced to be established under the football governance rule during the King’s Speech last November.
Lucy Frazer, Secretary of State for Culture, Media and Sport, recently warned the Premier League that if it failed to reach an agreement with the EFL, then the government would intervene to do so.
She spoke at last February’s Financial Times Business of Football Conference, stating: “We don’t want this to be an issue for the regulator. We have been really clear from the outset that football should resolve the issues in football.
“We want the Premier League and the EFL to come to a deal that is in both their interests. They know what they should be negotiating and what the best outcome is for both of them.
“We’ve been very, very clear we would like football to come to a resolution on a deal. We’ve also been clear that if they don’t, the regulator will.”
Whilst the arrival of the independent regulator has been welcomed by some subsections of the UK government and football fans, Premier League clubs have raised questions regarding its overall scope and authority.
Despite this, it is believed that if the regulator is brought in to finalise the New Deal with the EFL, they are far more confident in a package to be agreed upon.
